"It would present Mr Howard as the leader of the past decade and Mr Rudd as the leader of the next one," the Sydney Morning Herald newspaper said of the plan, to be unveiled in the electorally critical "Sunshine State" of Queensland.

After criticising Howard for failing to deal with climate shift during Howard's launch in Brisbane on Monday, Labor sources said Rudd would unveil grants for research into solar and wind power, geothermal "hot rocks" energy and wave power.

The fund would help private firms develop and commercialise renewable technologies such as wave power generators, already deployed on several Australian city beaches. Australia is the world's biggest per head carbon polluter.

Climate scientists have warned Australia, the world's driest inhabited continent, may be suffering "accelerated climate change" and is already in the grip of a decade-long drought tipped to wipe up to 1 percent from the economy.

Rudd has already promised an elected Labor government would require 20 percent of electricity produced in Australia, or about 45,000 gigawatt hours, to come from renewable sources by 2020 to help cut greenhouse emissions, up from about 5 percent in 2006.

But the conservatives are targeting clean energy against renewable, including clean coal, with Howard refusing to ratify the Kyoto climate pact, arguing it would hurt Australia's coal industry and cost jobs.

With the election contest entering its final stages, Howard was on the defensive on Wednesday over conservative election promises worth about A$62 billion against US$47 billion for Labor.

Howard, 68 and in power since 1996, told the Australian Financial Review newspaper he would still keep the budget surplus above 1 percent of GDP, and said the surplus for 2007/08 could be up to 50 percent higher than the A$14.4 billion forecast on October 23.

But Howard told Australian Broadcasting Corp. radio he would not rely on a higher-than-forecast budget revenue to fund his election commitments.

"I am simply observing that in the past the surpluses have in the last three years come in above budget-time estimates, but I want to make very clear I am not banking on that," Howard said.

Howard is fighting a mood among voters for change despite an economic expansion lasting 16 years and unemployment at 33-year lows. Rudd, 50, has promised "fresh thinking" and generational change, as well as reform of education, health and labour laws.

In a bid to counter voter perceptions of Howard as a better economic manager, Labor is aiming to spend less than the government but paint its ideas as better in a contest marred by claims on both sides of copy-cat policy theft.

Underscoring Labor's environment pitch, central bank board member Warwick McKibbin on Wednesday called for a carbon tax and carbon trading to encourage local companies to cut their greenhouse emissions.

Labor has promised to cut emissions by 60 percent of 2000 levels by 2050, but has set no interim targets. Howard has also refused to set targets.